Bear Steepening

EGBs have been offered through the day and curves have bear steepened.

• Bunds have sold off sharply with yields 1-8bp higher on the day and the long end of the curve underperforming. The 2s30s spread is 6bp wider.
• OATs have followed bunds lower with the curve similarly 6bp steeper.
• BTP yield action at the longer end has mirrored core EGBs, while the short end of the curve has underperformed.
• The ECB's Weidmann earlier stated that the rise in bond yields was not too concerning, while Luis de Guindos stated that bond spreads appeared calm. Nonetheless, Weidmann asserted that the ECB stands read to adjust its policy tools if there is an unwarranted tightening of financial conditions.
• Germany earlier allotted E2.5395bn of the 0% May-36 bund.